Hong Kong’s interbank borrowing costs climbed across the curve, as the city’s currency interventions continued overnight, taking this week’s total to HK$16.8 billion (Dh7.71bn).

The three-month Hong Kong dollar interbank offered rate, known as Hibor, jumped by the most in more than two months, while the one-month rate climbed by the most since June 22. The Hong Kong Monetary Authority (HKMA) bought HK$14.6bn of local dollars Wednesday, according to the de facto central bank’s page on Bloomberg, after the currency declined to the weak end of its trading band.

With the HKMA having begun intervening again this week for the first time since May, the aggregate balance in the city will fall to HK$92.6bn on Friday. This would mark the first time since 2008 that the measure of interbank liquidity dips below HK$100bn. Analysts are watching to see when efforts to defend Hong Kong’s dollar will start driving up borrowing costs in the city.

The Hong Kong dollar traded at HK$7.8496 per dollar as of 12:58pm local time, near the weak end of its permitted range of HK$7.75 to HK7.85. The Hang Seng Index was down 0.6 per cent, headed for its lowest close in a year.

"The outflow of funds from Hong Kong is a normal and inevitable process for Hong Kong dollar interest rate normalisation," HKMA chief executive Norman Chan wrote in a statement Thursday, adding the authority will continue to buy the Hong Kong dollar at HK7.85 against the greenback to ensure exchange-rate stability.